Verizon: Covad Falsified Reports

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Verizon: Covad Falsified Reports

Troubled high-speed Internet provider Covad Communications Group (COVD) tried to save money by falsifying reports that blamed service problems on Verizon Communications (VZ), according to a suit filed by Verizon on Monday.

The suit, filed in federal court in San Jose, California, alleges that Covad told its employees to claim falsely that Verizon had failed to provide the necessary lines to hook customers up with fast digital subscriber lines, or DSL.

Verizon said it had sworn statements from 26 former Covad employees who claimed to have been pressured into making the bogus reports. More than 22,000 such false reports were made, Verizon said.

Covad spokeswoman Martha Sessums denied the allegations.

"We consider the suit a harassment suit that thinly veils the fact Verizon has a very poor service and is inventing complaints to cover up its own ineptitude," she said Tuesday.

"Our employees are honest and work hard to get the customers' installation complete in as fast a time as possible, often having to overcome the complications of the installation process with telecommunications providers such as Verizon," she said.

Verizon's general counsel, former U.S. Attorney General William Barr, said the New York-based company would seek to recapture the money it lost sending technicians out to fix nonexistent problems in the lines. He would not specify the amount, other than that it was millions of dollars.

"What we're talking about here is an orchestrated and pervasive misrepresentation by (Covad) management to shift costs," he said.

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Reconsidering ION: Sprint said it would review the status of its high-speed integrated network project, and may change service plans by the end of the summer.

Credit Suisse First Boston analyst Dan Reingold, who recently met with Sprint's management, said the re-evaluation may prompt Sprint to curtail or cancel the commercial launch of its ION, or integrated on-demand network, services for consumers and small businesses.

ION allows customers to make phone calls, send and receive faxes, and cruise the Internet over a single phone line.

Sprint confirmed it was examining its ION project but declined to comment on what aspects were under review.

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European alliance: British Telecommunications (BTY) and Deutsche Telekom (DT) said Tuesday they will cooperate in developing third-generation mobile phone networks in both Germany and British Isles.

Debt-laden BT, under pressure to cut costs, said the preliminary agreements could result in savings of around 20 percent of its total 3G capital expenditure.

Under the agreement, the partners will coordinate the rollout of their 3G infrastructure and share new and existing base stations, including masts and antennas in major urban areas. They will also cooperate on initial network construction and operation, and expect further substantial savings on operations costs.

BT had planned to spend 10 billion pounds ($13.7 billion) over five years to roll out 3G networks at home and abroad. Following the deal, it hopes to cut that capital spending by around 1.3 billion pounds, a spokesman said. It has already spent around 9 billion pounds buying 3G licences in Britain and Germany alone.

In Britain, the agreement brings together BT's mobile operation BT Cellnet with One2One, part of Deutsche Telekom's T-Mobile. In Germany, it links T-Mobile to BT's subsidiary Viag Interkom.

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A kinder, gentler engine: Toyota (TM) said it would introduce a new, fuel-efficient hybrid engine system later this year.

The system, called THS-M (Toyota Hybrid System-Mild), can be used in many types of automobiles, the company said. The system will make its debut in Japan.

Toyota officials promise a 15 percent improved fuel efficiency over conventional gasoline-powered cars, since the new system automatically shuts down the engine to prevent idling.

Emission of toxic gases will be half of the government's standard for last year, it said. Toyota said it had no plans so far to introduce the system overseas.

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Blame it on the Yanks: Citing a slowdown in the U.S. economy, Nokia (NOK) said Tuesday that its earnings and revenue growth will be lower than expected in the current quarter.

The announcement sent shares of the mobile phone maker down more than 19 percent in afternoon trading in Helsinki.

Nokia said it had increased its market share in cellular phone sales but that the global mobile phone market will "show only very modest growth this year compared to 2000." Instead of a 20 percent revenue growth rate for the second quarter which it predicted in April, Nokia said it now expects less than 10 percent growth for the period.

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Leaking cell phones to go: NTT DoCoMo (NTT) will begin replacing defective handsets made by Sony which were found to have a software glitch. There were pulled from shelves a month ago.

The SO503i cell phone, 420,000 of which were already sold before the recall, will be replaced free beginning June 13. New handsets will go on sale at the end of June, DoCoMo said in a statement.

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AOL tries high-speed cable: Cox Communications (COX) struck a deal with AOL to conduct a technical trial that would test the delivery of AOL's high-speed Internet service over Cox's high-speed network.

AOL (AOL) has a pact with its own Time Warner Cable, but regulators have said it cannot begin offering high-speed Internet services until rival EarthLink (ELNK), which also has a pact with Time Warner, has launched its services.

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Promotion time: JDS Uniphase (JDSU) said that Greg Dougherty, 41, would take over as chief operating officer of the entire company – a broader role than his previous job as COO of the company's amplification and transmission group.

JDS also said that chief executive and co-chairman Jozef Straus, 54, had taken on the additional title of president.